Mumbai: The board of trustees of the employees provident fund organisations (EPFO) has agreed to keep interest rate unchanged at 8.5 per cent for its nearly 43 million subscribers during fiscal 2006-07.

The board will submit its recommendations to the finance ministry, which is expected to notify the rate shortly.

"Amid protest by some trade union representatives, it has been decided to pay 8.5 per cent interest rate on provident fund," labour minister Oscar Fernandes said after the meeting of the EPF central board of trustees.

He said the decision would put a burden of Rs450 crore on the EPF fund but that the deficit could be offset from a surplus of Rs590 crore lying in the interest suspense account, contingency reserve and special reserve fund.

Even after paying 8.5 per cent interest rate, the fund would thus have a surplus of Rs83 crore.

Fernandes said the EPFO had constituted a sub-committee to assess the board`s finances. The report submitted by the committee said there would be a surplus of Rs595 crore with the board.

The EPF has a corpus of Rs94,000 crore, including pension fund.

The total interest outgo for 2006-07 would be to the tune of Rs7,800 crore, Fernandes said.

He said the board also discussed the government`s suggestion to invest five per cent ofthe corpus in the stock market but no decision was taken as representatives of the left-affiliated trade unions rejected the decision of the board, while demanding at least 9.5 per cent interest rate.